(All figures are presented in
- Revenue increased 27% quarter-over-quarter to
$6.1 million - EPS grew 155% to
$0.28 per share in the quarter - Cash on hand of
US$42.1 million , generatedUS$5.7 million in Q3 2023 - Repurchased 1.3 million or 5% of common shares through an efficient SIB process
Q3 2023 Key Highlights
(All figures in
- Epuris product revenue grew 11% on a constant currency basis.
- Cipher's pipeline candidate MOB-015 (nail fungus treatment) completed its Phase 3 study enrollment ahead of plan in early
October 2023 , as announced by Moberg Pharma AB. - Total revenue increased 27% to
$6.1 million compared to$4.8 million in Q3 2022. - Licensing revenue increased 54% to
$3.1 million due to royalty income from the Absorica portfolio. - Adjusted EBITDA1 increased 37% to
$3.6 million compared to$2.6 million in Q3 2022. - Ended the quarter with
$42.1 million in cash (CDN$56.9 million 2) or$1.66 per share (CDN$2.25 2).
Management Commentary
During the quarter, we commenced a Substantial Issuer Bid ("SIB") to repurchase shares, and we were successful in deploying
Q3 2023 Financial Review
(All figures are in
- Total revenue was
$6.1 million in Q3 2023, an increase of 27%, compared to$4.8 million in Q3 2022. - Licensing revenue was
$3.1 million in Q3 2023, an increase of 54%, compared to$2.0 million in Q3 2022. - Product revenue was
$3.0 million in Q3 2023, an increase of 7%, compared to$2.8 million in Q3 2022. - Net income was
$7.0 million , or$0.27 per diluted share, an increase of 165%, compared to$2.7 million , or$0.10 per diluted share in Q3 2022. - Adjusted EBITDA1 in Q3 2023 was
$3.6 million , an increase of 37%, compared to$2.6 million in Q3 2022.
Corporate Developments
- On
September 5, 2023 , the Company announced its intention to commence a Substantial Issuer Bid. Upon expiry onOctober 11, 2023 , Cipher repurchased 1.29 million common shares atCDN$4.65 per common share, for an aggregate purchase price ofCDN$6 million , representing 5.1% of the total common shares outstanding. - On
July 5, 2023 , Cipher announced that Moberg obtainedEuropean Union approval for MOB-015, paving the way for their commercial launch across 13 countries inEurope . Cipher believes this is an important precursor to the eventual approval in theU.S. andCanada . - On
October 6, 2023 , Moberg announced it had completed the recruitment and enrollment of 384 patients with Onychomycosis (nail fungus) ahead of plan for its ongoing MOB-015 Phase 3 Study inNorth America . Moberg expects topline results inJanuary 2025 .
Business Strategy & Outlook
Cipher continues to focus on enhancing long-term shareholder value, through the following strategies:
- Operating the business in an efficient and prudent manner to deliver continued earnings
- Continuing to collaborate with our partners to advance our product pipeline, including MOB-015 for the treatment of nail fungus and CF-101 for the treatment of moderate to severe plaque psoriasis
- Advancing our studies on DTR-001, our pipeline product for the removal of tattoos
- Acquiring cash flow positive pharmaceutical assets to further diversify our product portfolio
- Continuing to pursue opportunities to effectively allocate capital to enhance long-term shareholder value
Financial Statements and MD&A
Cipher's Financial Statements for the three- and nine-month periods ended September 30, 2023, and Management's Discussion and Analysis (the "MD&A") for the three and nine month periods ended September 30, 2023, are available on the Company's website at www.cipherpharma.com in the "Investors" section under "Financial Reports" and on SEDAR+ at www.sedarplus.ca.
Notice of Conference Call
Cipher will hold a conference call on November 10, 2023, at 8:30 a.m. (ET) to discuss its financial results and other corporate developments. To access the conference call by telephone, dial (416) 764-8650 or (888) 664-6383 and use conference ID 74393673.
A live audio webcast will be available at the Investor Relations section of the Company's website at http://www.cipherpharma.com or at https://app.webinar.net/AMLJYMeYrlE. An archived replay of the webcast will be available until
About
Forward-Looking Statements and Non-IFRS Measures
This document includes forward-looking statements within the meaning of applicable securities laws. These forward-looking statements include, among others, statements with respect to the timing of the receipt of the topline results from MOB-015 Phase 3 North American study, the expectation of approval of MOB-015 in the
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, which give rise to the possibility that predictions, forecasts, projections and other forward-looking statements will not be achieved. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. We caution readers not to place undue reliance on these statements as a number of important factors, many of which are beyond our control, could cause our actual results to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the extent and impact of health pandemic outbreaks on our business, our ability to enter into development, manufacturing and marketing and distribution agreements with other pharmaceutical companies and keep such agreements in effect; our dependency on a limited number of products; our dependency on protection from patents that will expire; integration difficulties and other risks if we acquire or in-license technologies or product candidates; reliance on third parties for the marketing of certain products; product approval process by regulators which can be highly unpredictable; the timing of completion of clinical trials, regulatory submissions and regulatory approvals; reliance on third parties to manufacture our products and events outside of our control that could adversely impact the ability of our manufacturing partners to supply products to meet our demands; we may be subject to future product liability claims; unexpected product safety or efficacy concerns may arise; we generate license revenue from a limited number of distribution and supply agreements; the pharmaceutical industry is highly competitive with new competing product entrants; requirements for additional capital to fund future operations; products in
1) EBITDA and adjusted EBITDA are non-IFRS financial measures. The term EBITDA (earnings before interest, taxes, depreciation and amortization,) does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing a further understanding of operations from management's perspective. The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation of property and equipment, amortization of intangible assets, non-cash share-based compensation, changes in fair value of derivative financial instruments, provision for legal settlement, loss on disposal of assets and loss on extinguishment of lease, impairment of intangible assets, restructuring costs and foreign exchange gains and losses from the translation of Canadian cash balances.
2) At the
The following is a summary of how EBITDA and Adjusted EBITDA are calculated:
| Three months | Three months | Nine months | Nine months |
$ | $ | $ | $ | |
Net income and comprehensive income | 7,031 | 2,654 | 12,728 | 6,955 |
Add back: | ||||
Depreciation and amortization | 269 | 338 | 954 | 648 |
Interest income | (533) | (157) | (1,315) | (197) |
Income taxes | (3,909) | (359) | (3,728) | 1,590 |
EBITDA | 2,858 | 2,476 | 8,639 | 8,996 |
Unrealized foreign exchange loss (gain) | 434 | 72 | (21) | 130 |
Restructuring costs | — | — | 269 | — |
Share-based compensation | 315 | 84 | 968 | 169 |
Adjusted EBITDA | 3,607 | 2,632 | 9,855 | 9,295 |
Adjusted EBITDA per share – basic | 0.14 | 0.10 | 0.39 | 0.37 |
Adjusted EBITDA per share – dilutive | 0.14 | 0.10 | 0.38 | 0.36 |
Condensed interim consolidated statements of income and
comprehensive income
Three months ended | Nine months ended | ||||
2023 | 2022 | 2023 | 2022 | ||
$ | $ | $ | $ | ||
Revenue | |||||
Licensing revenue | 3,090 | 2,013 | 6,936 | 6,158 | |
Product revenue | 2,978 | 2,779 | 9,306 | 9,608 | |
Net revenue | 6,068 | 4,792 | 16,242 | 15,766 | |
Operating expenses | |||||
Cost of products sold | 1,076 | 860 | 3,114 | 3,056 | |
Research and development | 10 | — | 110 | 66 | |
Depreciation and amortization | 269 | 338 | 954 | 648 | |
Selling, general and administrative | 1,690 | 1,384 | 4,400 | 3,518 | |
Total operating expenses | 3,045 | 2,582 | 8,578 | 7,288 | |
Other (income) expenses | |||||
Interest income | (533) | (157) | (1,315) | (197) | |
Unrealized foreign exchange loss (gain) | 434 | 72 | (21) | 130 | |
Total other (income) expenses | (99) | (85) | (1,336) | (67) | |
Income before income taxes | 3,122 | 2,295 | 9,000 | 8,545 | |
Current income tax expense (recovery) | 116 | (586) | 328 | 1,237 | |
Deferred income tax (recovery) expense | (4,025) | 227 | (4,056) | 353 | |
Total income tax (recovery) expense | (3,909) | (359) | (3,728) | 1,590 | |
Net income and comprehensive income for the period | 7,031 | 2,654 | 12,728 | 6,955 | |
Income per share | |||||
Basic | 0.28 | 0.11 | 0.50 | 0.27 | |
Diluted | 0.27 | 0.10 | 0.50 | 0.27 | |
Condensed interim consolidated statements of financial position
As at | As at | |
2023 | 2022 | |
$ | $ | |
Assets | ||
Current assets | ||
Cash and cash equivalents | 42,086 | 28,836 |
Accounts receivable | 6,701 | 6,802 |
Inventory | 2,528 | 2,152 |
Prepaid expenses and other assets | 447 | 371 |
Total current assets | 51,762 | 38,161 |
Property and equipment, net | 412 | 481 |
Intangible assets, net | 1,885 | 2,754 |
15,706 | 15,706 | |
Deferred tax assets | 20,764 | 16,674 |
Total assets | 90,529 | 73,776 |
Liabilities and shareholders' equity | ||
Current liabilities | ||
Accounts payable and accrued liabilities | 7,110 | 4,107 |
Income taxes payable | 5,237 | 4,904 |
Contract liability | 281 | 257 |
Current portion of lease obligation | 101 | 101 |
Total current liabilities | 12,729 | 9,369 |
Lease obligation | 252 | 327 |
Total liabilities | 12,981 | 9,696 |
Shareholders' equity | ||
Share capital | 18,486 | 17,719 |
Contributed surplus | 5,697 | 5,358 |
Accumulated other comprehensive loss | (9,514) | (9,514) |
Retained earnings | 62,879 | 50,517 |
Total shareholders' equity | 77,548 | 64,080 |
Total liabilities and shareholders' equity | 90,529 | 73,776 |
SOURCE
© Canada Newswire, source